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NEW YORK ( TheStreet) -- Luminex Corporation (Nasdaq: LMNX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.

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Highlights from the ratings report include:
  • LMNX's revenue growth has slightly outpaced the industry average of 9.6%. Since the same quarter one year prior, revenues rose by 12.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LMNX's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.20, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • Net operating cash flow has significantly decreased to -$3.66 million or 138.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, LUMINEX CORP's return on equity significantly trails that of both the industry average and the S&P 500.

Luminex Corporation engages in the development, manufacture, and sale of proprietary biological testing technologies and products for the life sciences and diagnostic industries. Luminex has a market cap of $858.5 million and is part of the health care sector and health services industry. Shares are up 23.5% year to date as of the close of trading on Wednesday.

You can view the full Luminex Ratings Report or get investment ideas from our investment research center.

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